Recently, NFT is almost the biggest focus of the entire investment market. But do you really understand NFT? There are no two identical banknotes in the world, but there are countless identical papers. Let’s first talk about the difference between FT and NFT.
There is actually no difference between the bitcoins in your wallet and my wallet, and there is no so-called uniqueness. It belongs to Ffungible Token (Homogeneous Token, FT for short), which can be cut, just like the Tom Bear token in the game field and the points in the game. There is no unique number, and there is no so-called ownership.
The NFT (non-homogeneous token) is unique. It refers to digital assets held on certain blockchains that are easy to exchange and have individual uniqueness. They are mainly located on Ethereum. Of course, they also include Matic, Flow, Wax and other blockchains. There are differences between blockchain digital assets and cannot be interchanged, so they are called non-fungible tokens (Non-Fungible Tokens). In the real world, real assets have ownership certificates. Similarly, in the blockchain world, NFT tokens can maintain ownership records and proof of authenticity.
Although the number of NFT projects is currently growing rapidly, the concept of NFT is not entirely new. In the early days of blockchain, several projects tried to enter this field. Today, Bitcoin’s colored coins are considered to be the pioneers of NFTs as we know them. Several blog posts and papers on this topic published in 2012 have already opened discussions on the possibility of such tokens. It is only recently that the concept of meta-universe has been proposed, and it has only begun to enter the public’s field of vision after the explosion of NFT. The most common NFT is Ethereum’s ERC 721. In addition, there are other NFTs, such as ERC 1155 based on Ethereum developed by Enjin. ERC 1155 is a new standard for video game tokens. NFTs are mostly stored in suitable digital wallets, such as MyEtherWallet and Ledger Hardware wallets, which are easy to customize and trade in the market.
NFTs differ in value and attributes. If homogenized tokens are more similar to currency, then NFTs are more similar to property rights certificates. Behind each NFT, there is a different item, so its value may be completely different. Take the previously popular encrypted cat NFT as an example, it corresponds to an electronic pet called the encrypted cat. Just like cats in reality, this electronic cat is very different in terms of pedigree, coat color, development and so on, so its corresponding NFT value is also very different. Some electronic cats are relatively common, so the price may be only a few dollars; while some electronic cats are rarer in some shapes, so their price may reach hundreds of thousands or even millions of dollars.
Regardless of the current NFT projects on the market, more and more people are beginning to explore the true value of NFT. It can not only prove the ownership and authenticity of intellectual property rights such as original artwork and game tokens, but also represent stocks. , Real estate and other real assets. NFT not only exists in the digital space, but more importantly, it can represent any type of physical asset. As a kind of “digital twin”, it can be connected with anything that exists in the real world, and realize the ownership transfer and transaction of physical assets in the digital market. NFT may become a bridge from the physical world to the virtual world, and NFT will also be applied in the field of games and collections.
Maybe you already have a general understanding of NFT in your mind, so let’s take a look at some of the current unique attributes of NFT:
NFT includes information about the attributes of each token in its code, making it different from other tokens. Encrypted digital artwork may have encoded information embedded in each pixel, and encrypted game items may have many details at the bottom, allowing the game client to understand the items owned by the player and their attributes. One of the key differences between cryptocurrency and non-homogeneous tokens is that each NFT is unique and complete, and cannot be directly swapped with any other asset through identity, value, or utility.
Every NFT has transaction records on the chain, from creation to transfer. Every token can be verified to prove its authenticity and prevent fraud-this is very important for owners and potential buyers!
In order to make NFT attractive to buyers, NFT is also scarce. This can ensure the long-term development of encrypted assets, and there will be no hidden dangers of short supply.
NFT cannot be cut into parts for trading. Just as half a concert ticket will not be sold in half, NFT cannot be divided into smaller denominations.
Like all traditional digital assets and tokens built on smart contract blockchains, NFTs are fully programmable, and the CryptoKitties and Axie Infinity projects have introduced breeding mechanisms to encode tokens. Every non-homogeneous token is composed of metadata, which gives each token its personality, including size, owner’s name, scarcity, etc. The potential of NFT is limitless.
NFT combines the best features of decentralized blockchain technology and non-homogeneous assets. Unlike ordinary digital assets issued and supervised by centralized entities, NFT encrypted assets can be taken at any time, and they can also give the owner real ownership. True ownership is one of the key components of any NFT. With the continuous development of the digital economy, there is no doubt that NFT will play a key role in bringing the digital world and the physical world closer than ever.
Since NFTs are decentralized, there is no need for a central issuing agency and no third-party intervention, making their transfer easier. For example, in the game field, NFT solves the problem of exclusivity in traditional games, because assets can be easily transferred between different blockchain games. The assets created or purchased by users in NFT games are owned by the user, not by the game company, so they can be transferred between different worlds and can be taken from one game to another.
Traditional digital assets do not have a unified way of expression, and by displaying non-homogeneous assets on the public chain, developers can construct all non-homogeneous token standards that are universal, reusable, and inheritable. This includes basic primitives such as ownership, transfer, and simple access control.
The extremely fast tradability of non-homogeneous assets will bring about an increase in liquidity. The NFT market can meet the needs of various audiences, from strict traders to less mature traders, allowing assets to be more widely available to more buyers. Just as the 2017 ICO boom spawned a new class of assets driven by instant liquid currency, NFT has expanded the unique market of digital assets.
The non-homogeneous token standard allows NFTs to easily move between multiple ecosystems. When a developer launches a new NFT project, these NFTs can be immediately viewed in dozens of different wallet providers, can be traded in the market, and can be displayed in the virtual world because the open standard is read and write The data provides a clear, consistent, reliable and permitted API.
What is the future of NFT? It’s hard to imagine, and the only limit is your imagination. In short, NFT, as a hot new thing in the chain, has quickly become the focus of more and more people’s attention. Although NFT is still facing huge doubts, many people think that this is another huge bubble, but the emergence of any new thing must be accompanied by huge controversy. We do not deny the existence of bubbles, but believe that the true value of NFT will gradually become apparent after the bubbles are squeezed out one after another.